SGI looks to expand its market

Traditionally focused on customers involved in pure research and development and technical computing applications, Silicon Graphics Inc. (SGI) is now aiming to broaden its market share in the financial and biotech industries, according to an official from the company.

"SGI has refocused and turned down business that wasn't right for us. We put together our resources (and targeted them) on what we do best and this year, we'll aggressively extend our offerings to the new markets," said Jeff Lam, South China and Hong Kong general manager of SGI.

Lam said, for the regions that he oversees, the company has already closed a deal with a finance company in Hong Kong, which will be deploying a cluster of SGI 1450 servers running Linux-based OSes and powered by 34 processors. Details will be announced later, he added.

In addition, for the biotech sector, the University of Zhongshan in China has also started conducting DNA-related research with the use of the Irix-OS based Origin 2000 server, Lam said.

According Lam, in South China the majority of the company's revenue comes from the telecom industry (44 percent), followed by the government and education sectors, which both take up over 10 percent of the overall earnings, respectively.

In Hong Kong, SGI's revenue comes from the education sector (40 percent) and the government (over 10 percent), he added.

To help acquire market share within the finance companies of Asia-Pacific, SGI will be opening its first financial engineering center in the region by June this year, he said. The center will be located either in Hong Kong or Singapore, will serve to provide product demonstrations and support for the company and its partners, Lam said.

Despite the fact that SGI as a whole incurred a loss of US$76 million in the last quarter, the South China and Hong Kong operation remain profitable, Lam said. He also added that he is optimistic that the operation will continue to do well and stay profitable throughout the 2001 financial year, which ends in June.

The key driving force for SGI's sales in South China and Hong Kong, according to Lam, is the company's Intel IA-32-based servers and workstations. On the other hand, the performance of the newly released high-end Origin series, which enjoys popularity in the US, is flat here as a result of the supply shortages, in particular the lack of a certain ceramic component needed to make the product, Lam said.

As part of the restructuring that SGI has put into motion, the company is installing an Oracle enterprise resource planning system globally, and is streamlining its supply chain and order administration processes, Lam said. He added that the US operations started to implement the system earlier this year, though he does not expect to see the system rolled out until the end of 2001.

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